Inflation - The Next Wave

Inflation - The Next Wave

In this Equitile Conversations episode, Gerald Ashley and George Cooper explore inflation not as a short-term blip from the US-Iran war, but as a deeply embedded, policy-driven structural problem affecting the UK, US and global markets. Cooper points to immediate market signals: US 30-year bond yields have climbed above 5% and UK yields are approaching 6%. With debt-to-GDP ratios now exceeding 120% in both countries, low-yield debt issued years ago is maturing and rolling over at much higher rates. This will force governments to devote a growing share of tax revenue to interest payments, crowding out other spending. While the energy shock from the Gulf conflict is accelerating the surge, Cooper argues inflation has become normalised. Consumers now accept steadily rising prices, and producers readily pass on costs. Strategic petroleum reserves and existing pipeline stocks have delayed the full impact, but fertiliser and chemical shortages are already disrupting global planting seasons, pointing to food-price pressure over the coming year. The result is likely a multi-year rolling inflation wave. Crucially, Cooper contends that governments no longer genuinely oppose moderate inflation. It functions as a stealth tax — imposed without legislation — that erodes the real burden of public debt and helps finance chronic deficits. Voters often welcome the accompanying rise in house and asset prices. On investment, government bonds are dismissed as “certificates of charitable giving” — almost certain to deliver real losses. The only meaningful benchmark is delivering returns above inflation. Politically, radical spending cuts risk tipping heavily indebted economies into a Japanese-style debt-deflation trap. Across the spectrum, both left and right have embraced interventionism; pro-growth liberalisation and deregulation are absent from the political menu. Looking ahead, Cooper draws parallels with the 1970s “three-wave” inflation pattern. The post-lockdown surge was wave two; the current energy-driven shock is wave three. He expects inflation could peak around 9% in the next few years. This Episodes Book Recommendations Gerald A History of Money: From Ancient Times to the Present Day, by Glyn Davies [https://www.amazon.co.uk/History-Money-Ancient-Times-Present/dp/0708313515] George The Death of the Left, by Simon Winlow [https://www.amazon.co.uk/Death-Left-Begin-Beginning-Again/dp/144735415X/]

Emerging Markets – Travellers Tales

In this Equitile Conversations episode, hosted by George Cooper he invites Gerald Ashley and special guest Richard Knight to share their observations from recent trips to Vietnam and Argentina, contrasting them with the UK's economic performance and mindset. Richard highlights Vietnam's striking dynamism upon arrival: modern airports far superior to those in the UK, and streets buzzing with early-morning workers earning money for upcoming holidays rather than leaving early. This reflects deferred gratification (earn first, spend later) versus the West's debt-fuelled "enjoy now, pay later" culture. Vietnam blends nominal communism with vibrant street-level capitalism: minimal visible rules or police, yet chaotic motorbike traffic flows safely through high personal responsibility. The economy feels entrepreneurial and growth-oriented, prioritising people over strict regulations or environmentalism. Gerald notes that Argentina, once among the world's richest countries pre-WW1, now feels like a "recovering" economy, after decades of heavy socialism. It lacks Vietnam's urgency and outward trading energy, partly due to geographic isolation. In contrast, the UK appears conservative, focused on preserving wealth, status, and ecology while adding layers of rules "for safety." Western systems smooth risks and outcomes, reducing incentives and dynamism. They both question whether cutting excessive rules could revive UK growth, or if prosperity has bred complacency. By way of comparison the following data are cited, GDP per capita (recent figures): UK $52,000–60,000; Argentina $13,000–14,000; Vietnam $4,700–5,000 (with strong 8%+ growth in 2025). Southeast Asia shows more explosive potential than Latin America's recovery. About Richard Knight Richard Knight spent a career in FX markets in investment bank dealing rooms around the world. He later founded and ran a creative agency specialising on UHNW projects, and nowadays he writes on macroeconomics, and markets. His strong focus is on behavioural dynamics, and examining how incentives, perception and decision-making shape outcomes. He combines institutional market experience with practical systems thinking. Now largely retired from traditional roles but Richard actively trades, writes and acts as a legal expert witness in major global FX class actions. This Episodes Book Recommendations Gerald Fall - The Mystery of Robert Maxwell by John Preston [https://www.amazon.co.uk/Fall-Mystery-Maxwell-John-Preston/dp/0241388686] Richard Critical Mass - How One Thing Leads to Another by Phillip Ball [https://www.amazon.co.uk/Critical-Mass-Thing-Leads-Another-ebook/dp/B00IIRZFLQ] George Onassis by Frank Brady [https://www.amazon.co.uk/Onassis-Extravagant-Life-Frank-Brady/dp/0989913732]

Chokepoint Charlie

In this March 29th, 2026 episode of Equitile Conversations, Gerald Ashley and George Cooper offer a downbeat assessment of the escalating US-Iran war in the Gulf and its profound impact on global supply chains and financial markets. They describe a major negative supply shock triggered by widespread destruction of energy infrastructure, with the US reportedly planning ground troops into Iran. Oil prices spiked near US$120 per barrel before moderating above US$110 despite strategic reserve releases and temporary de-sanctioning of Russian and Iranian supplies. Fuel shortages are already appearing globally. They both warn the disruption will be durable, lasting months to possibly years, affecting not only energy but also fertilizers and agriculture. Emerging second-order effects, such as diesel and fertilizer shortages for Australian farmers, are expected to drive food price inflation with a 6–12 month lag. This points to a protracted inflationary period reminiscent of the late 1970s. George argues that central banks should avoid hiking interest rates, as this is an exogenous shock; tightening policy risks compounding the damage by discouraging necessary investment. Despite this, the ECB is considering rate rises and the Bank of England appears uncertain. The discussion also covers ballooning US debt (now US$39 trillion), strained fiscal positions in the West, questions over AI investment viability, and geopolitical shifts. Using the physics concept of the “elastic limit,” they suggest the global order may not return to its previous state, potentially weakening US dominance and accelerating de-dollarisation. This Episodes Recommendations Gerald The Beer Game [https://en.wikipedia.org/wiki/Beer_distribution_game] A free easy to play simulation here: https://beergame.transentis.com/ [https://beergame.transentis.com/] George Tiny Rowland – A Rebel Tycoon by Tom Bower [https://www.amazon.co.uk/Tiny-Rowland-Tycoon-Tom-Bower/dp/0434073393]

Energetic Times

In this February 2026 edition of Equitile Conversations, host Gerald Ashley interviews Nic Rogers, head of research at Equitile, revisiting energy markets after their accurate 2025 call: volatile natural gas but subdued oil. Rogers highlights a rotation toward value and "heavy asset, low obsolescence" stocks, with energy sector outperformance early in 2026, leading the S&P 500—unusual and historically bearish for other sectors. Oil majors and services firms offer strong cash flows, 5-10%+ buyback/dividend yields, low debt, and historically cheap valuations. The oil-to-gold ratio (~80:1, vs. historical ~20:1) signals extreme undervaluation; past extremes below 30:1 averaged 32% oil returns in the following year. Bullish drivers include emerging market demand (e.g., India), potential weak dollar, geopolitical tensions (Iran, Venezuela, Russia), and limited supply growth from underinvestment (upstream capex ~36% below 2014 peaks) and high shale depletion. Offshore discoveries (Guyana, Brazil, Namibia) favour deepwater, with tight ultra-deepwater rig capacity post-Transocean/Valaris merger potentially boosting services. Many energy analysts remain bearish (e.g., IEA glut forecasts), but markets increasingly ignore them, starting to price in a premium. A supply squeeze could surprise, especially if US shale softens. Natural gas ties to AI/data centre power demand as a bridge fuel until nuclear scales (decades away). US LNG exports double capacity, lifting the price floor amid volatility ("widow maker"). Midstream pipelines offer stable, toll-like returns. Coal holds approx. 28% global share, the market is Asia-centric (China uses it to firm renewables), with supply constraints in the West (e.g., Australia permitting near-zero new coal mining projects). Overall, Rogers paints a bullish case for oil (upside surprise) and gas (rising floor despite swings), amid rotation from digital to physical assets. Coal will continue to persist longer-term. About Nicholas Rogers Nicholas Rogers is Head of Research at Equitile Investments, joining in 2024. With close to a decade of experience in wealth and asset management, he previously worked at several bulge bracket banks, including HSBC and Citi in Sydney, Australia. His interests lie in the commodity markets and identifying broader macroeconomic trends.  This episodes book recommendations Gerald Prisoners of Geography [https://www.amazon.co.uk/Prisoners-Geography-BESTSELLER-Marshall-Geopolitics/dp/1783968591] by Tim Marshall Nicholas The Rise of Carry [https://www.amazon.co.uk/Rise-Carry-Consequences-Volatility-Suppression/dp/1260458407] by Lee, Lee, and Coldiron

Let's Get Physical

In the first episode of 2026, George Cooper and Gerald Ashley examine the persistent “debasement trade”: fiat money weakening while physical assets surge. They revive the “Savoy Gold Dinner ratio,” a metric from the 1970s/80s created by gold mines fund manager Julian Baring. In August 1971—days after Nixon closed the gold window—a comparable Savoy Grill dinner cost £5.67 per head. With gold at $40/oz (£16.66/oz at the fixed rate), one ounce bought roughly 3 dinners. At their recent meal on the 7th January: The bill came to £236.32 per head (with modest wine), with gold at $4,460/oz (~£3,303/oz), yielding 14 dinners per ounce—a 4.7× gain in gold’s purchasing power over 54 fiat years. Interestingly in wage terms, the meal’s burden barely budged: 1.4 days of average weekly earnings in 1971 (at £20 a week) vs. 1.6 days today (now at £736 a week). The Savoy has kept pace with labour costs, but gold has vastly outrun inflation as a store of value. This reflects a wider rotation: investors favour scarce physical assets—industrial metals, fertilizers, shipping, energy—over easily copied digital ones. AI commoditises software moats (e.g., image generation displacing Adobe tools; potential chip-design replication), eroding advantages for asset-light firms. Gold supplants bonds as the prime safe haven amid fiscal stress. Governments are increasingly close to Hyman Minsky’s “Ponzi stage,” with US debt interest topping $1 trillion yearly, driving money creation that inflates tangible-asset demand. But Bitcoin, despite debasement hype, is stalling - its digital replicability (via substitutes) contrasts with bullion’s scarcity. This episode highlights a return to capital-hungry physical realities over ephemeral software. View the article on Gerald and George's dinner at the Savoy in The Times: https://www.thetimes.com/business/companies-markets/article/dine-out-on-gold-how-an-ounce-will-now-buy-lunch-for-14-at-the-savoy-grill-qx8hpb8rh [https://www.thetimes.com/business/companies-markets/article/dine-out-on-gold-how-an-ounce-will-now-buy-lunch-for-14-at-the-savoy-grill-qx8hpb8rh] This episodes book recommendations Gerald Does God Play Dice?: The New Mathematics of Chaos [https://www.amazon.co.uk/Does-God-Play-Dice-Mathematics/dp/0140256024/] by Ian Stewart George Genghis Khan and the Making of the Modern World [https://www.amazon.co.uk/Genghis-Khan-Making-Modern-World/dp/0609809644/] by Jack Weatherford